Question

option 500 is incorrect please help

Scenario 5.6: Consider the information in the table below, describing choices for a new doctor. The outcomes represent different macroeconomic environments, which the individual cannot predict. We assume the doctor's utility of income function is given as: U(I) = 10.5, where I represents income. Outcome 1 Outcome 2 Prob. Income Prob. Income Job Choice Work for HMO 0.95 $100,000 0.05 $60,000 0.2 $250,000 0.8 $30,000 Own practice Research 0.1 $500,000 0.9 $50,000 Refer to Scenario 5.6. The expected utility of income from Own practice is 173 272 500 239 dependent on which outcome actually occurs.

Answer 1

# Own Practic Prob. Income 0.2 250,000 30,000 U2 I 0.5 Esputed Utility : z Pi 0 (213) 2 [0.2 x (2 50,000)°S] + [ 0.8 % (3 00000.5) 2 238.56 ~ 239 Eyected Utility of Incom from own Prachu 4th option is correct CS Scanned with CamScanner